Michael Porter and his five competitive forces
We have taken some detours, but it is finally time for our last installment of “Who Gave you that idea?”, our series on the thought leaders from the last 20 or so years who have influenced our own products and processes. For this final feature, we turn to Michael Porter, an author and professor at Harvard Business School. From his 1979 article in Harvard Business Review titled “How Competitive Forces Shape Strategy” through the present, Mr. Porter has become established as the leading authority on competitiveness and an organization’s strategy.
Porter’s focus is on true organizational competitiveness as the convergence of 5 elements – an organization’s customers, competitors, product substitutes, barriers to competitive entry and suppliers. Studying this combination of influences on the organization’s competitive position provides a much clearer view to determine the best strategies and initiatives to grow the organization.
In response to Porter’s work, we have broadened the front end of our Vision Navigation strategic planning process to incorporate much of his competitive theory. Each organization or industry is impacted to a different degree by the Five Forces. We help our clients identify the degree to which each force impacts their organization and then develop strategic initiatives based on a thorough analysis of those key forces. It has proven to be a highly valuable process resulting in a stronger strategic assessment for our clients.
How can you incorporate Porter’s theory into your own organization? For a good primer, we encourage you to get your hands on his 2008 article “The Five Competitive Forces That Shape Strategy” through Harvard Business Review. It is a great introduction to his theories. Or, for a smaller, but equally good taste of the competitive forces, view the Harvard Business Publishing interview with Michael Porter by clicking here.
If we can help you incorporate Porter’s work into your strategic planning process, email us or call toll free at 877-276-4414. We would be happy to give you some guidance on how to include his valuable ideas into your strategy.